If you’re like many CPAs, you don’t use words like “maybe,” “probably,” “perhaps” or “possibly” — at least in the workplace. Those are messy words that leave too much room for ambiguity and uncertainty.
Unfortunately, that messy pool of ambiguity is where the world is headed and your clients expect you to help them wade through those murky waters of uncertainty.
Legendary venture capitalist Peter Thiel likes to talk about the difference between calculus (determinate) and statistics (indeterminate). In calculus, Thiel says you make precise determinations of outcomes. For instance, calculus is what helps us send rockets to the moon. Closer to home, you can use calculus to figure out exactly how long it will take to drain a swimming pool, even one that’s irregularly shaped with varying depths. In statistics, however, Thiel says there are no certainties. Statistics is all about probabilities, bell curves, random walks and the trend line of “best fit” between random data points. Bottom line, Thiel believes there’s a powerful societal shift towards statistical ways of thinking—and away from calculus.
Here’s the thing: The binary, black and white approach, while necessary to deliver accurate information, is no longer enough.
When one looks into the future, there are two types of people who continually come up short: those who think they know everything and those who know nothing. You’ve got to tell clients, “We don’t know what the future holds, but based on everything I know about you and what you’re trying to accomplish, this is what I think will give us the best probability of success.” That’s statistics; that’s not calculus. Sure, it requires a basic understanding of calculus, but that’s just the beginning.
Making the leap from an absolute to probable mindset
Jordan Peterson, author of
I know what you’re thinking: “It’s risky for me to talk to clients about probabilities, because my advice could potentially be wrong.” You’re probably thinking: “The advice ledger doesn’t balance. I’m used to providing clients with answers, not opinions.”
Remember, computers are providing most of the simple answers. Where you come in as a high-value advisor is by serving as a trusted sounding board for your clients. A computer can’t help clients manage their thought processes and can’t help clients come to their own rational conclusions. To do that, you have to get better at asking clients thought-provoking questions. You have to know more about your client than you ever did before.
Here’s where it gets tricky. You’re not being asked to help clients in situations when there’s a 90 percent chance of a decision being right and only a 10 percent chance of it being wrong. If that were the case, would they really need your advice?
Most of the tough decisions are going to be “educated coin tosses” and your clients are looking for a true thinking partner to help them come to a decision. For instance, a business owner client might be anguishing about whether or not to acquire another company. The target company might have great huge upside potential and a great staff, but there will be a tremendous amount of extra work involved for your client, and your client will have to assume the target company’s debt.
These are not easy decisions. It’s a huge benefit to a client to have a trusted advisor who really understands their financial situation — someone who can help them “cut the cards” and come to a confident, well-thought out decision. You’re the ultimate catalyst for making that happen.
Opportunity cost: the risk of not offering clients advice
Sure, it’s risky to offer your opinion, but how about the risk of not offering your clients advice? By playing it safe, you avoid the risk (and possible embarrassment) of being incorrect, but you also risk becoming increasingly irrelevant to your clients. To me, that’s a much bigger risk.
People don’t make numbers decisions; they make emotional decisions. From their investment portfolio and monthly spending, to selling their home, deciding when to retire or selling their business, you’ve got to become comfortable digging around those gray areas of your clients’ lives. Your advice won’t always be right 100 percent of the time, but clients will appreciate you for taking the time to truly understand them and for helping them make the best possible decisions, knowing you always have their back.
